URGENT >> BULLETIN >> MOVING: (Updated 6:24 P.M. EDT U.S.A.) The U.S. Securities and Exchange Commission has entered the TelexFree fray in Nevada Bankruptcy Court and has petitioned the judge to transfer the case to Bankruptcy Court in the Central District of Massachusetts, an area that is a potential TelexFree stronghold. The Central District covers communities such as Worcester, Ashland, Framingham, Holliston, Bellingham, Franklin and Medway.

In a filing, the SEC also noted that the FBI and Department of Homeland Security are involved in a separate TelexFree probe led by the office of U.S. Attorney Carmen M. Ortiz. How long that probe has been under way was unclear in the filing.

SEC lawyers asserted Massachusetts was the “nerve center” of TelexFree and that TelexFree’s “late Sunday” bankruptcy filing in Nevada on Oct. 13 was a “transparent attempt to avoid Massachusetts, where their ‘business’ and numerous witnesses are located and where various government agencies have been investigating their fraudulent conduct.”

“[U]ntil [April 15], the U.S. Attorney’s Office was operating in secret,” the SEC advised a federal judge in Massachusetts last week, according to a transcript provided the Nevada Bankruptcy Court. “We couldn’t reveal ourselves without tipping things, so we had to wait until the search warrant was executed [on April 15.]”

TelexFree nevertheless knew the regulators were coming and started moving money, the SEC said.

One SEC investigator advised the Massachusetts judge who granted an asset freeze that he’d personally viewed “several hours” of TelexFree-related YouTube videos and performed transcription work before the SEC filed its fraud complaint last week, according to the transcript.

“[T]here are plenty of examples of each of those people helping to promote the scheme and helping to explain how great it is, how much money you can make for virtually no effort, and without — they’re all active enough, these people — well [James] Merrill, [Carlos] Wanzeler, and [Steve] Labriola are officers, they certainly know this,” the SEC investigator advised the Massachusetts judge.

Opinion: There might be a Regulatory Institution that approves the functioning of these kind of mlm companies before they were launched to people and during their first year of live been controlled by this Regulatory Institution and ONLY if during this first year of live it is proved these firms are selling the product/service they are offering, only after that, then leave them to go their way…In deed, now is in the contrary: first they are “approved” and after 1 or 2 years of functioning when people lose their money the Institutions act to prove they were ponzis.

maria: In deed, now is in the contrary: first they are “approved” and after 1 or 2 years of functioning when people lose their money the Institutions act to prove they were ponzis.

Hello Maria,

I am aware of no regulatory body that “approved” TelexFree. On the other hand, I am aware of umpteen bids by TelexFree promoters to plant the seed that TelexFree’s business registration in Massachusetts was “proof” of its legitimacy.

That’s a very old song in the Ponzi playbook. The AdSurfDaily and Zeek Rewards Ponzi fraudsters did the same thing.

maria:
Opinion: There might be a Regulatory Institution that approves the functioning of these kind of mlm companies before they were launched to people and during their first year of live been controlled by this Regulatory Institution

Perhaps you mean there *should* be?

I’d say no. TelexFree had been around for many many years. (According to their own material, 14 years, and only recently ret-con’ed to 2 years).

And what exactly is the regulatory agency going to do? Periodic audits? Random “mystery shopper” inspections of members? No, this just adds bureaucracy and will NOT significantly reduce number of scams.

The idea that you “post ads” and earn hundreds of percent on money you put in… is already illegal (securities fraud).

4) tougher penalties on perpetrators… which includes PARTICIPANTS, not just company execs. Take down more Ponzi pimps than just the few on top. Hit like the top 10% or more with industry ban for 6-60 months depending on how much they made off the scam. If they violate that, they can be hit with contempt and actually jailed.

5) Publicize the heck out of prosecution and sentencing. Those people need to be named and shamed so any Googling of them brings up their involvement in prior scams, and far more prominent than any SEO attempts can try to obfuscate.

6) Expedite prosecution, hit it when the scheme was young. Took US authorities TEN MONTHS after the Brazilians acted to stop TelexFree.